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2012 NHL CBA Negotiations: NHLPA Puts All The Pressure On NHL Owners

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There's a good reason that many folks were feeling pessimistic about this upcoming NHL season, not only concerned that the season wouldn't start on time but that the season could be in jeopardy of being lost altogether. After all, the NHL made a drastically aggressive proposal to the NHLPA last month that was myopic in its scale and view of the current state of the NHL, asking the players to take a 24 percent cut on salaries because teams were struggling to keep up with expanding salaries.

The NHLPA in turn spent the past month planning a "counter-proposal" to the NHL, with this proposal telling us just how nasty and prolonged the negotiations could become. After all, no one in their right mind considered the NHL's proposal just or fair, even when weighed against the rising player salaries, considering the amount of concessions the league was asking for just seven years after the players were bent over the barrel in negotiating the last CBA.

Larry Brooks of the NY Post said it best:

Imagine if the NHLPA had come to the NHL a month ago and said the players would go on strike unless all existing contracts immediately were increased by 24 percent. Imagine if Zach Parise had used his union to indirectly tell Wild owner Craig Leipold the $98 million sounded good at the time he signed as a free agent, but the winger would now require the deal be bumped to $121.52 million before he would put on a Minnesota uniform.

The NHL's proposal essentially asked the players to take the full brunt of the financial disparities between NHL teams, between the rich and the poor, after the NHLPA took the full force of change after the lockout in 2004-2005. As such, asking the players to do so again seemed like a sure sign we were headed to another prolonged negotiating period, especially if the NHLPA's counter-proposal was as drastically different as many expected.

What happened instead was nothing short of brilliant. The NHLPA, instead of offering a direct counter-proposal, put an alternate proposal on the table that has many across the league encouraged that perhaps -- after all -- this could get worked out sooner than later.

Unfortunately, it's all up to the owners at this point.

Here are the basics of the very complicated proposal made by the NHLPA, as best as we can determine:

  • The proposed collective bargaining agreement would be good for just three years, with an option for a fourth. In that fourth year, the option would be to revert back to the current CBA.
  • The players will be taking a smaller cut of HRR over that time, compared to the expected average revenue growth of the league.
  • Player salary would be artificially slowed over those three years: year one will increase by 2%, year two by 4% and year 3 by 6%. Average revenue growth is 7.1% per year.
  • According to those figures, the players would be voluntarily taking a cut between $400 million and $800 million, depending on the revenue growth of the NHL. The current growth rate would mean a $465 million cut by the players.
  • The proposal does not include a "luxury tax" with a hard salary cap in place each season, with "exceptions."
  • Those exceptions: Teams could go up to $4 million over or $4 million under the cap by trading cap space.
  • The proposal would also establish a limit on non-player spending by teams.
  • Current rules for player salaries, contract lengths, etc, would not change -- although the NHLPA will apparently submit proposed changes to systemic issues separately.

Essentially, Donald Fehr and the NHLPA just gave the NHL and the owners a stiff lesson in the art of negotiations. When the NHL made it's initial proposal, asking for drastic changes to free agency and contract terms on top of demanding another major rollback in player revenue shares -- down to 46 percent from the current 57 percent figure -- it was painfully clear that the NHL was trying to play hardball with such an outrageous proposal, likely looking for a compromise that would still heavily favor the owners.

Instead, Donald Fehr and the NHLPA proposed an incredibly smart business plan for the NHL that is logical and makes sense given what has transpired over the past seven years of the current CBA. The owners and the NHL made their proposal with the logic that the league is financial despair, that player salaries are out of control and that without a drastic rollback in salaries and changes to free agency the league would be in major trouble.

In reality, the league has never been in a better spot than it is now. Overall revenue has nearly doubled from what it was when the new CBA was put in place, with Gary Bettman's salary reportedly rising from $3.4 million in 2004-05 to the nearly $8 million it was from 2010-2011. The salary cap has risen along with revenue, according to the CBA agreed upon by the owners back in 2005 and suddenly those figures are still much too high and must be decreased, because teams are having such trouble keeping up with the salary cap floor.

Essentially, the owners are asking the players to save them from themselves. After all, the owners have been the ones freely signing massive long-term contracts meant to circumvent the CBA they had agreed upon, and signing big free agents to incredibly lucrative contracts at a time the NHL is attempting to put forth the front they are struggling to make ends meet. Something didn't add up, and Donald Fehr took advantage.

This isn't about players vs. owners, this is about the owners vs. themselves. This is about the top six or seven teams not being willing to help out the rest of the teams in the league, with the NHL asking the players to take up the brunt of that cost with their recent proposal. The NHLPA, meanwhile, essentially stated that they are willing to take a pay cut, knowing that certain franchises are in help, but that it's going to take the rest of the teams help as well to get everyone back on the same page.

"We do believe that the proposal the players made today, once implemented, can produce a stable industry ... that can gives us a chance to move beyond the recurring labour strife that has plagued the NHL the last two decades," said Fehr. "In essence, when you boil it all down, what we're suggesting is that the players partner with the financially stronger owners to stabilize the industry and assist the less financially strong ownership groups."

Emphasis mine.

Fehr has turned this into a battle between the owners, presenting a plan that more than half of the league would essentially agree to right now -- given some obvious tweaks and negotiating -- with the teams on the top still likely holding strong that they refuse to help the rest of the league when the players salaries can be cut to accomplish the same feat.

Last season, the NHL managed to turn the NHLPA into the bad guys by painting the union as the killers of the proposed realignment plan -- in what was obviously an opening PR salvo in the CBA negotiations that would be coming down the road. The NHL attempted to do the same with this last proposal, making insanely drastic demands of the players why crying poverty and pointing out how incredibly egregious salaries and contracts had become.

Now, it's clear that this is going to become more of a battle between the owners than it will be a battle between the NHLPA and the NHL. After all, most of the league and the players want to avoid a work stoppage at any and all costs -- there's just too much to lose if even a month of the season isn't played, let alone half the season or all of it. Instead, this is going to be about how much the teams at the top will be willing to help the teams at the bottom, with the players stating they are more than willing to help as well if everyone can just work together in continuing to grow the league at the same rate we've seen the past few years.

Of course, this isn't the perfect proposal by the NHLPA. There are parts of this that make no sense, that the NHL will never agree to -- I don't even know how trading cap space would work, and I doubt teams will be wiling to accept a limit on non-player spending, even though that sounds like a sound business practice for most of these owners. The owners will also not want such a short CBA and will likely look for something that is at least five years in length. That being said, the NHLPA made a much better business-oriented proposal than the owners and everyone knows it.

The NHL is expected to be meeting once more with the NHLPA, to discuss yesterday's proposal. How the league responds over the next few days will tell us all we need to know about how serious the league truly is in getting an agreement in place and getting this hockey season started.